The U.S. housing market continues to change as we approach July 2025. High mortgage rates, rapidly growing inventory, and varying trends between the regions are contributing to a unique environment. On the bright side, current trends show a slight uptick in the sales of previously owned homes. At the same time, mortgage rates continue to drive buyer behavior. According to analysts’ predictions, 30-year fixed mortgage rates will continue to remain flat, ranging between 6.90% and 6.60%. They are watching a descending triangle pattern that may lead to a downside breakout.
Current Mortgage Rates and Projections
As of the time of writing in early July 2025, prevailing 30-year fixed mortgage interest rates are between 6.7% and 7.0%. This is up from 6.2% in the comparable September of 2024. This increase follows a recent peak rate of 7. Mortgage rates descending triangle pattern possibly indicating a breakout. The 6.60% support level is notable, in particular, as very significant. Analysts predict that breaking this level could drive rates down to the 5.50% range or even lower in the coming months. This reduction would go a long way in improving affordability and increasing homebuyer confidence.
Yet the current mortgage environment is still an impediment to prospective homebuyers, with elevated rates pushing borrowers’ monthly payments even higher. This situation drives many buyers to reassess their purchasing power and overall housing goals, leading to a more cautious approach in the market.
Existing Home Sales Trends
Although high mortgage rates continued to make buying a home difficult, sales of previously-owned homes jumped 2% from a year earlier in January 2025. That’s an increase of four months in a row! For the month of September, sales of previously owned homes came in at around an annualized rate of 3.93 million. This growing number suggests that even as buyers contend with elevated borrowing costs, many are still able to seize opportunities in a shifting market.
New listings are overwhelming sales, fueling the imbalance. In May, there were 34% more sellers than buyers – a clear sign that the market is changing quickly in favor of buyers. As of June 2025, active listings have reached a post-pandemic high of more than 1 million. That’s a fantastic 29% jump from last year.
The increase in inventory indicates that sellers are ready to come to market even in today’s environment of elevated mortgage rates. This would help expand buyer choice. Starting in December, this added competition among potential sellers will exert downward pressure on home values due to increased competition.
Housing Market Outlook
U.S. housing market prospects for July 2025 remain threatened by a decelerating pace of home appreciation. In addition, regional differences set up different, and sometimes competing, impacts across different markets. Other areas benefit from overall price stability due to high demand, coupled with a lack of inventory. At the same time, some suffer while increasing supply meets cooled-off demand.
Higher mortgage rates paired with rising inventory are creating unprecedented challenges and opportunities for buyers and sellers on both sides of the aisle. On the ground, buyers are dealing with the realities of what it takes to finance a home in today’s climate. In addition, sellers need to modify their expectations around price and time on market.